Europe needs new ways to finance housing

Creative new financing methods are needed to cope as demographic and other trends drive up Europe’s need for new housing, participants told a roundtable organised by the Housing Solutions Platform on 23 November in Brussels.

While access to affordable, safe housing is a fundamental right, it is still not within reach for residents of many European countries. In 2015 nearly 17% of the EU’s population lived in overcrowded dwellings, with nearly 25m people suffering from severe housing deprivation.

One cause is that spending on house building has decreased in relative terms in many European countries, said Cédric Van Styvendael, President of Housing Europe, the Federation for Public, Cooperative and Social Housing. That doesn’t mean less is being spent on housing-related needs though. “In the UK, there is four times as much spending on housing benefits as on building homes,” he said. “This problem goes beyond our sector. For example, house prices increase faster than income.”

Building more affordable and better-quality housing requires financial mechanisms to be readily available to would-be tenants, private landowners and government institutions. Money and investment are key, as are models of finance that blend public, private and civil society investors. So the EU is working on a range of investment funds and mechanisms to steer more private investment into social housing. “We need to associate private solutions and public financing,” said Benjamin Angel, Director for Treasury and Financial Operations at the European Commission Directorate-General for Economic and Financial Affairs. “We need to build more investment platforms.”

Housing also plays a role in wider social and economic issues. More building tends to boost growth. And refugees need to be housed in a way that looks after their other needs. “We need to take into account all the elements that our society needs – not just housing – in order to integrate refugees,” said Rosa Sánchez-Yebra, Vice-Governor for Social Development Strategy at the Council of Europe Development Bank (CEB). “Social housing is related to development, and local governments alone may not have the required capacity.”